The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

Day by Day cartoon

Revisions/extensions part 2 (10:16 am 3/8/2010) - I originally posted this on February 22 using estimates from the January 2010 Monthly Treasury Report to fill in the numbers for January 2010. The Social Security Office of the Chief Actuary has now released the final numbers for that month, and the news is worse. The original post is below the fold (unless you’re reading just this post, in which case it’s below the update). I decided to append to this and bump it up to today’s date.

Between February 2009 and January 2010, the combined OASDI Social Security “Trust Funds” spent $112 million more than it took in in taxes. As noted in the original post (below), the 12-month primary (or cash) deficit is the first since monthly records were kept in 1987, and likely the first since the “forever” fix of 1983.

The estimate using the Treasury’s numbers was a $91 million primary deficit, which instead of proving too pessimistic based on recent analysis of the difference between the Treasury Monthly Statements and the OACT final numbers, proved to be too optimistic.

To contrast, just last year, the Obama administration expected the FY2010 primary surplus in the combined “Trust Funds” to be $21,028 million (or $21.028 billion – I will use a single base to make sure the numbers hit home) as part of its FY2010 budget. Now, it’s estimated to be a $33,754 million deficit, a shift of $54,782 million to the red. That’s $54,782 million that, thanks to the well-over $1,000,000 million (or $1 trillion) deficit that was already planned for this year, needs to be borrowed by the Treasury on the open market.

The situation is not yet as dire as it was between 1975 and 1981, when the combined funds ran overall yearly deficits, or 1982, when the Old-Age and Survivors Insurance fund borrowed from the Hospital Insurance (Medicare Part A) fund to stay fully-capitalized. However, raising the withholding tax 14% and the self-employment tax 64% isn’t exactly going to play well, and like the previous time, it will only slow the inevitable.

Note – This is the original post from February 22, 2010.

I really could call this Part 1 of the double-dip bad news on Social Security because in the course of digging deeper into the numbers, I found a second bit of bad news. While Social Security’s Office of the Chief Actuary has not released the final financial data of the “Trust Funds” for January 2010, the Treasury Department has released the basis for those numbers, the January 2010 Monthly Treasury Report, and it appears that the combined OASDI “Trust Funds” have finally gone into a 12-month primary (or cash) deficit for the first time since monthly records were kept in 1988, to an estimated tune of $91 million.

I do have to note that the Office of the Chief Actuary does revise these numbers somewhat. However, adjusting them to match the cumulative difference between the Monthly Treasury Reports and the Social Security final numbers between January 2009 and November 2009 only drops the 12-month primary deficit to $63 million.

To contrast, just last year, the Obama administration expected the FY2010 primary surplus in the combined “Trust Funds” to be $21,028 million as part of its FY2010 budget. More on that in a bit.

The situation is not yet as dire as it was between 1975 and 1981, when the combined funds ran overall yearly deficits, or 1982, when the Old-Age and Survivors Insurance fund borrowed from the Hospital Insurance (Medicare Part A) fund to stay fully-capitalized. However, raising the withholding tax 14% and the self-employment tax 64% isn’t exactly going to play well, and like the previous time, it will only slow the inevitable.

Revisions/extensions (7:01 pm 2/23/2010) - Where’s my copy editor, or at least a new keyboard? I originally had the 12-month deficit as $98 million in the post (the graphic was and still is correct).

Heh, I had to comment just for the anti-spam word (Curley said that a lot).
Drat, now I have to say something useful. OK, let’s try this:
Back in the last Administration, a plan was proposed to let people voluntarily pay a part of their Social Security into a fund that kind of resembles my IRA and 401K. That plan was summarily dismissed, which makes this situation even more ironic.
Well, there you go. Hopefully that worked, if not, sorry for wasting your time.

To be fair to the Left, that plan, as well as Paul Ryan’s Roadmap, would drain the “Trust Funds”. However, unlike the “do-nothing” plan of the Democrats that require ever-greater infusions of cash from higher taxes and/or even more deficit spending to prop up the current Ponzi scheme, they would have replaced said Ponzi scheme with a mix of privately-held funds and a floor provided by the feds.

[…] 12-month primary (or cash, if you prefer) deficits actually began in the February 2009-January 2010 period, when Social Security ran a $114 million primary deficit. An estimation using numbers from the […]